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Tips for Finding Cheap Car Insurance

Tips for Finding Cheap Car Insurance

By Jeff Youngs, August 10, 2012
Finding affordable car insurance is easier than you might think, but does take an investment of personal time for success. Before you begin the shopping process, however, you should know that having a clean driving record and a clean credit report are two key ways to reduce your car insurance premiums, because insurance companies use that data to infer that a customer is responsible, and therefore less likely to make an insurance claim.

If your credit and driving record sparkle under the harsh light of scrutiny, and you still want to make sure you get the lowest premium possible, there are three things you can do to lower your car insurance costs.

Understand State Requirements and Compare Rates
First, you should compare insurance rates between different insurance companies using identical coverage and deductible amounts. Start by understanding the minimum car insurance requirements for your state in terms of liability, comprehensive, collision and medical payments coverage. Determine if you're comfortable with the minimum requirement, or if you'd like to have additional coverage. Then compare plans between different insurance companies using identical coverage and deductible amounts. The deductible amount is the amount you will pay out-of-pocket in the event that you file a claim.

Ask About Discounts and Pay Up Front
When comparing plans, be sure to ask about discounts. Often, insurance companies will offer discounts if you don't drive your vehicle very often or very far, if you have a good driving record, if you've taken a defensive driving course, or if you're married, a student or a member of the armed forces. Members of organizations are sometimes offered an insurance discount. If you insure more than one car with an insurance company, or you hold a homeowner's policy or a life insurance policy through the company, you can get a multi-car or multi-policy discount. Paying your premium in full, on an annual or semi-annual basis, rather than making monthly payments, can also reduce expenses, and if you pay monthly, doing so electronically rather than with a paper check can sometimes result in an insurance discount.

Other Steps You Can Take
If you've shopped rates between insurance companies and you've taken advantage of all available discounts, but your premiums are still too expensive, you can take further steps to reduce costs. For example, you could increase your deductible to a higher out-of-pocket amount in the event a claim is made. You could also drop unnecessary coverage, like rental car reimbursement. You can also reduce your coverage to state minimums, though experts do not commonly recommend this somewhat risky move.

With a little bit of effort and some time dedicated to comparison-shopping between companies, it's easy to find the most affordable car insurance available.

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